If you have followed our Big Picture column for the past year, you will know that as industry analysts and observers, we study this industry and the markets that compose it on a daily basis. Because of that, we often get asked about our thoughts concerning trends in the coming year. So we thought we would do a joint column sharing our predictions for the tech industry in 2013.

Tim’s Predictions

Each year about this time, I put out a list of predictions for the coming year. I have been doing this for 23 years, and over that time I have had a reasonable level of success with these predictions. I have had some spectacular failed ones too, like the year I said Microsoft would buy RIM.

Because of our work and research, we get to see a lot of technologies in the works behind the scenes. Looking at the data, we can make some educated deductions about tech trends for the new year.

Companies like Zappar and Aurasma have some great technology that adds an AR touch to published content, posters and physical places. AR technology has been in the works for many years, but the demos I have seen from these two companies have me believing that 2013 is the year that AR becomes very important to the mobile world. More important, many of these AR companies have created great relationships with movie studios, gamemakers, publishers and more, and their technology is already showing up in many of their products. I wrote about these two companies recently, so check out some of the examples I have at the end of this column to get a visual sense of why I think AR will be big in 2013.

2. Google’s Chromebooks will get more consumer attention, gaining traction in 2013.

Google Chromebooks built by Acer and Samsung are priced around $250 and have become an attractive alternative for consumers, as price continues to be a real issue with this market segment. I know that these machines only work while online, but the proliferation of public wi-fi makes this less of an issue going forward. We all know that a Web browser as an operating system will someday happen, and these Chromebooks are a good first step. Buyers of these laptops will also serve as an important test bed for industry watchers in 2013, giving us important hints about how this market will develop over the next five years.

3. Hybrids and convertibles will see high interest from IT departments.

In our discussions with IT directors recently, we have heard that they are quite interested in hybrids or convertibles — also known as laptop-tablet combo devices. Today, with tablets part of the BYOD (bring your own device) trend, as well as the purchases of tablets for their own specific internal use, these IT managers are now forced to support three types of devices: PCs, tablets and smart phones.

The idea of just having to support a convertible or hybrid, instead of a separate laptop and tablet, is quite attractive to them. The first generation of these products, such as Lenovo’s Yoga, HP’s Elitebook convertible and Dell’s XPS DUO, are being bought in good numbers from IT types who are starting to test them inside their organizations, and newer models that are even more powerful will be out by Q3. All this points to the potential growth of hybrids and convertibles within IT beginning in 2013.

Given the prices of 7-in. tablets — which can be as low as $79 but mostly hover around $199 — it’s not a stretch to believe that this form factor will dominate the market in 2013. But what’s not obvious is how they’ll impact the PC market. The problem for consumers with 10-in. tablets is that with a cheap Bluetooth keyboard, these tablets almost become mini-laptops. Also, since many consumers can do about 80% of what they do on a PC by using a tablet instead, many consumers are either extending the life of their current PC, or if they buy a new one, they purchase a cheaper model since they see it sitting idle most of the time. The traditional PC won’t go away because it’s still needed for heavier computing tasks like managing media, creating digital movies and other tasks.

However, if consumers begin to adopt 7-in. tablets in big numbers, they may go back to buying new laptops since 7-in. tablets are mainly for consumption. They are not good at all for traditional productivity tasks. Many industry execs hope this theory is right because it could actually help laptop sales grow in 2013 instead of shrink, as many have suggested it will. I believe that in 2013, consumers will sort out which tablets are best for them, and in doing so will finally determine the role the PC will play in the future.

I am going out on a limb with this last prediction, but one of the more interesting developments with 10-in. tablets is that if you add Bluetooth keyboards, they become like mini-laptops. The Android and Windows sides of the tech market are moving quickly to create tablet-laptop combo devices, and business and consumers alike are showing interest in them. If these types of products gain serious traction, I believe Apple may need to respond to this growth threat in the same way it entered the 7-in.-tablet market — despite the fact that Steve Jobs told everyone that Apple would never make a 7-in. tablet.

But imagine a sleekly designed hybrid that perhaps has the design lines of the MacBook Air, but with an iPad screen that detaches from its ultra-thin keyboard. For lack of a better term, I call it the MacBook AirPad or iPad Air. I know Tim Cook has denounced this type of design, suggesting it is like attaching a “toaster to a refrigerator,” but a sleek and elegant iPad-keyboard device designed by Apple would appeal to a lot of people, myself included.

Ben’s Predictions

The theme for my 2013 predictions is “going vertical.” The writing on the wall has been seen for some time now, and I believe 2013 is the year we will see it officially come to fruition: there is absolutely no denying the success of Apple’s vertical model.

In a mature consumer market — and if executed properly — being vertical is simply the most sustainable model by way of differentiation, competitive advantage and a host of other long-term strategic reasons. Many parallel industries and the vertical nature of their businesses illuminate the way for this reality.

Right now, Samsung is the most dominant Android smart-phone manufacturer. However, the company does not fully control or dictate the directions or agenda of Google as it relates to Android. Because of this, Samsung is dependent, to a degree, upon Google for future success. In a quickly verticalizing industry, this is a point of concern for Samsung. Samsung once invested in its own Bada operating system, but I believe it will further invest in owning its own software platform in order to fully unify its screen strategy. The most logical candidate is the Tizen operating system Samsung has been working on but has yet to release.

2. Microsoft will get into smart-phone hardware.

Microsoft signaled its intent to be a PC hardware company when it launched the Surface tablet. By doing so, Microsoft strained relationships with its existing hardware partners and went down a path that is hard to turn back from at this point. The next logical step is for Microsoft to get into the smart-phone hardware business — or acquire a company like Nokia or HTC — and begin controlling the hardware for the Windows Phone platform. I believe Microsoft will officially get into the smart-phone hardware game in 2013.

3. Apple will make a large investment in its supply chain.

In the personal-computing landscape, Apple is more vertical than any company right now. Others have some of the parts but have yet to go fully vertical and show that they can execute as vertical companies. Apple has already proved it is a well-oiled vertical machine, and I believe the company will further invest in that strategy by using its massive stockpile of cash to purchase key parts of its supply chain. The main reason for this will be not only to maintain its hardware margins but also to relieve many of the supply-chain bottlenecks that Apple deals with on a yearly basis. These investments could be things like owning a key display manufacturer, owning hardware-machining factories and even investing or co-investing in a foundry to manufacture its own semiconductors for all its computers.

4. Google will go fully vertical with Motorola.

Samsung is Google’s largest partner, and in many of the same ways that Samsung depends on Google, so too does Google depend on Samsung. The reality is that Android would not have the market share it does today without Samsung. So by Samsung investing more in its own future with a software platform, Android will be weakened. The only logical response is for Google to also officially go vertical with its Motorola purchase, taking its hardware future into its own hands. Google can do this by focusing Motorola on the high end with a Nexus-like strategy, or it can focus on the lower end by going for more volume than margins. I can see either scenario playing out.

To be entirely honest, I have some hope for RIM. I do think the company will make a modest rebound in 2013 with the release of its BlackBerry 10 devices. But to take back a significant share of the handheld market, RIM will need help from someone else. It makes the most sense in my mind for RIM to consolidate with a company that has the right marketing and a solid hardware vision. Perhaps Samsung could acquire RIM and make BlackBerry 10 its proprietary operating system if Tizen doesn’t work out. Any number of the growing Asian OEMs that could use better business platforms may show interest in RIM as well.

This should be a most interesting year in the world of technology. Aside from new innovations, changes in the PC landscape and mobile technology transforming the way people work, learn, communicate and play, it will also be a year of transition for many of the PC companies that have dominated the digital landscape for the past 30 years. Without strong mobile plays, their ability to compete will be diminished by the strong competitive positions of Apple, Google and Amazon. If they are to survive and thrive, they’ll need to fully embrace social media and find ways to partner with the Facebooks and Twitters of the world that are driving the next generation of social media and mobile advertising.

Indeed, 2013 will bring a lot of changes to the world of technology, along with some solid innovations that are bound to ingrain the digital lifestyle deeper into the fabric of our society.

Tim Bajarin is the president of, and Ben Bajarin is a principal at, Creative Strategies Inc., a technology-industry analysis and market-intelligence firm in Silicon Valley. They contribute to Big Picture, an opinion column that appears every Monday on TIME Tech.

I definitely think MS will go into smart phone hardware. However I think it may depend on how Surface sales continue to grow. Many of the other predictions seem some what logical. RIM will need to get acquired or go out of business.

I definitely think companies like Samsung & Apple will differentiate & gain competitive edges by controlling their supply chains & parts suppliers. We see it now with chips and patent wars.

My prediction is that convertibles and tablets powered by Windows 8 will dominate. Many prominent businesses will adopt such devices because they are preferred for doing serious work. The U.S. Army recently signed a contract for $617 million with Microsoft to use Windows 8 and Office 2013. We are now seen many good deals for Windows 8 computers. http://x.co/reL6

It would be nice if something IMPORTANT were to be developed ! ! . I have in mind something other than more PHONE-Junk ! ! -- Say, Automated Autos and equipment to enable Enhanced Industrial Productivity. . What IS being done is basically just more Teeny-Bopper gadgets ! ! . Enough already -- Let's get SERIOUS ! ! -- For the Nation AND For the PEOPLE in that Nation ! ! !

With the small exception of the prediction related to augmented reality, I'm nervous about the total lack of innovation in these predictions. Many of these predictions focus on already existing hardware and software, and finding new form factors for them. I'll be sad if 2013 is barren of new innovations. Perhaps the current cast of characters in technology are prime for disruption.

The only problem I see with a Asian OEM acquiring RIM is that will most likely trigger a response from the US government, resulting in RIM losing all of its US government customers. I doubt Samsung will want to take on the company, HTC probably will not have the cash reserves to do so. Leaving only really Chinese OEMs with the cash and the drive but not the customer trusts.

Samsung is in a bind, its mostly likely doesn't want to continue being jointed at the hips of Google but its customers have all bought into Google Play eco systems and getting customers to move eco systems it a difficult thing to do and even more challenging in a fast moving market like the smart phone market is. If Samsung does try to leave the Android train it could leave them years of catching up to do. Of cause they could use revolutionary technology like bendy screens to launch a new eco systems but that again is putting the hundreds of millions if not billions invested into that division on the line in an attempt to control it own future in mobile phones.

@Rilely I think we have to be careful to expect leaps in innovation every year. If you recall for a decade plus notebooks stayed on an evolutionary path and grew tremendously. I'm not saying this will happen for the same amount of time as notebooks, only that as a market is growing and not yet saturated like smartphones and tablets, it is important for the mass market to not be overwhelmed by technology because they are still figuring out their needs. Early adopters expect and want constant leaps in innovation but the mass market is more interested in usefulness and technology that solves problems.

However, an Apple hybrid could be truly innovative if done right and I mentioned several hardware advancements that certainly could be innovative. Leaps of innovation will come and given the vertical trend by the OEM leaders it will be hard to disrupt the market anytime soon. Especially since we have established that mature markets will pay for things they value and are not necessarily just looking for cheap.

The market is still a land grab locally as we work to get tablets and smartphones into the hands of every consumer on the planet. During a land grab the market functions very differently and over innovating for new audiences could actually be a poor strategy not a solid one.

@Rilely Actually you're so right they have to be innovating something beyond what we saw late in 2012 and yes i must admit somehow disruption has taking over the people of technology...but I sometimes optimize myself that there will be surprises in late 2013 and hope so eventually.